Impacts of aquaculture on the local current field and the erosion of the bottom sediment in the Bay of Fundy, Canada, have been investigated with a 3-dimensional hydrodynamic model. The model is evaluated against independent observations of the current. Model results show that the presence of fish cages restricts water flow and reduces the velocity in the surface layer occupied by the cages, but enhances the water velocity in the bottom layer beneath the cages. Sensitivity studies show that the change in the flow velocity beneath the cages is sensitive to variations in the drag coefficient and the height of the fish cages. As the drag coefficient increases, the bottom velocity also increases until a steady state value is reached. For the cage height, however, the tidal speed beneath the cages first increases with cage height and then significantly decreases with further increasing height. The maximum increase in velocity occurs when the cage height is about half the local water depth (H/H 0 = 0.5, where H is the cage height and H 0 is the water depth). The increase in bottom velocity significantly speeds up the erosion of the bottom sediment. The model results also indicate that there is an optimal drag coefficient and an optimal cage height for a specific farm site. By utilizing the optimal drag coefficient and height, it is possible to speed up sediment erosion beneath the cages and, thus, decrease the environmental problems caused by accumulated fish farm waste.